How Many Clients Will You Gain/Lose this Year?
How many clients will you gain or lose this year? A rough gauge of those figures might come from identifying whom among your client or referral bases is passively or actively loyal to you or your firm. Author Rohit Bhargava has written about this concept and understanding it presents two massive opportunities for your practice. The author of this article shares the insight gained from Rohit Bhargava.
How many clients will you gain or lose this year? A rough gauge of those figures might come from identifying whom among your client or referral bases is passively or actively loyal to you or your firm. Author Rohit Bhargava has written about this concept and understanding it presents two massive opportunities for your practice.
Reviewing Your Client Base for Passive Loyalty
Bhargava noted a McKinsey & Company report for the automotive insurance industry that showed there was “a significant number of customers who are loyal in name only … they remain with their carrier more out of inertia than satisfaction.”
Bhargava cited another study that concluded “a passively loyal consumer might buy the same brand five or six times out of inertia, but after that they are likely to consider other alternatives.”
So the first opportunity is turning your passively loyal clients into actively loyal clients before they leave.
The best place to start is by auditing your current client base. How many of them are passively loyal, as opposed to what Ken Blanchard calls Raving Fans in his book of the same name? If you have a hard time making this distinction with certain clients, assume they are passive.
Converting Clients from Passive to Active Loyalty
Bhargava says, “The business opportunity is to operationalize ways to transform these people … into being actively loyal instead.” And there are several things you can do to convert them.
If you provide certain services that some of your clients are not taking advantage of, now would be a good time to remind them of all you offer. Motivating clients to use more of your services is one way of increasing the likelihood they won’t switch to a competitor.
But the best thing you can do right now is reach out to your clients via a quick call or e-mail and ask questions to gauge how they feel about you now or to reveal how you can provide them even more value going forward. One example Bhargava suggests is, “If we could keep your business for the next two years, what would we need to do?” You can also ask questions that allow you to get a Net Promoter Score for each client.
These types of questions can help you get a feel for who is loyal and who may be taking their business elsewhere soon.
Also, you can be more valuable to your existing clients in other ways that have nothing to do with your core services. Being that we just started a new year, you could use that quick call or e-mail to ask them what their biggest area of focus is for 2023, as well as what opportunities or challenges they are facing this year. It shows you are interested in them … as you should be.
But the second opportunity is to get on the radar of your competitor’s passively loyal clients.
The bad news is that most of them are comfortable (for now) and indifferent to making a change. The good news is they would be quick to make the switch once they see how much better it could be with you!
For example, inertia often arises out of high switching costs … mostly time, and therefore, money related. (Think how much effort is required to switch banks or change credit cards.)
And finding ways to effectively disrupt the inertia of these prospective clients could unlock faster/higher growth for your practice.
So, what might you do that your competitors are not prepared to do to keep clients actively loyal? Maybe start a must-read practice area or industry niche blog or newsletter? Create a quarterly or semi-annual report analyzing M&A transactions in the industries you serve? Put on an annual must-go-to conference for your audience?
Last, do not think of all this as more work. Think of it as more FOR clients and not just for more clients. Though offering more FOR clients might well translate into more, better clients!
Everyone has a different idea of what a successful practice is. The practice you want is personal because it is based on what “successful” means to you. I help practitioners focus on the strategies, tactics, tools, and tech to build/grow/scale their versions of successful practices. If you want some help with that, e-mail me at rod@rodburkert.com.
